From Yahoo Finance · · 3m
Wall Street's Wednesday Calls: Rate Hike, Energy Surge, Crypto Collapse
The Fed raised rates as markets sold off, oil prices spiked on Middle East tensions, and crypto crashed after a Senate bill failed by one vote.
In brief
The Fed raised rates as markets sold off, oil prices spiked on Middle East tensions, and crypto crashed after a Senate bill failed by one vote. Major market moves on Wednesday were driven by the Fed's rate increase, geopolitical energy concerns, and failed crypto regulation, reshaping analyst sentiment across multiple…
Fed raises rates to 4 percent
The Federal Reserve increased the funds rate by 25 basis points to 3.75 to 4 percent today. Market watchers expect two more rate hikes over the next year to combat sticky inflation.
Major indices sell off ahead
All major stock indices finished lower on Tuesday in anticipation of the rate increase. The Nasdaq fell 0.78 percent, the Russell 2000 dropped 0.87 percent, and the S&P 500 closed down 0.45 percent.
Treasury bonds hit 20-year high
The 30-year bond closed at 5.37 percent, the highest in over 20 years, while the 10-year note hit 5 percent, its highest level since July 2007. Rising rates drove much of Tuesday's equity selling.
Oil prices surge on Middle East
Brent Crude jumped to $108.60, up 2.79 percent, and West Texas Intermediate rose to $105.80, up 4.37 percent. Renewed fighting in the Middle East and a Saudi pipeline shutdown pushed energy prices higher.
Natural gas and gold hold steady
Natural gas finished at $2.94, up 1.42 percent. Gold ended nearly flat at $4,294, down just 0.07 percent, while silver bucked the trend and rose 0.60 percent to $63.49.
Crypto bill fails by single vote
The Clarity Act crypto regulation bill collapsed in the Senate, failing 50 to 49. Banking industry lobbying and concerns over the President's involvement in crypto were cited as reasons for the defeat.
Bitcoin drops on regulation failure
Bitcoin fell between 3 and 4 percent to $76,180 after the Clarity Act failed. Ethereum traded at $2,420 as cryptocurrencies had a rough day across the board.
Credicorp and Union Pacific upgraded
JPMorgan upgraded Credicorp to Overweight with a $482 target price, while UBS upgraded Union Pacific to Buy with a $339 target price. Both moves reflect analyst confidence in these stocks.
Expedia and Hartford downgraded
Morgan Stanley downgraded Expedia to Underweight with a $235 target price. Mizuho downgraded Hartford Financial Services to Neutral and cut its target to $153 from $163.
Airbnb and Booking get coverage
Morgan Stanley initiated coverage of Airbnb with an Equal Weight rating and $170 target, and Booking Holdings with an Overweight rating and $230 target. Both travel stocks enter analyst coverage today.
Dutch Bros and Yum! Brands initiated
Seaport Research initiated Dutch Bros with a Buy rating and $50 target price. Seaport also started Yum! Brands with a Buy rating and $162 target price.
The one thing
Major market moves on Wednesday were driven by the Fed's rate increase, geopolitical energy concerns, and failed crypto regulation, reshaping analyst sentiment across multiple sectors.
